Is it right to label all emerging markets as the same type of economy? No. It’s passive analytics like passive investing for the lazies.
Archives of “Economy” tag
rssEurodollars
I have some questions regarding eurodollars and attempted to answer them myself: Why is GE quoted as interest rates, but de facto acts like a commodity ? Why were GE quotes up (rates on eurodollar deposits down) during the 2008/2020 crises. There was lots of cash demand.
– GE futures prices DO show de facto demand for cash (any fx cash offshore demand)
– GE is priced as rate to par of deposits
– GE reacts to or anticipates FED rates, as FED reacts to cash demand
– the rate of the deposits are not directly driven by supply and demand of global cash, but are driven by “external”/ non-eurodollar-mkt interest rates
– GE quotes can not be understand by the internal supply and demand of the eurodollar mkt conclusion: even GE-quotes are interest rates, GE-quotes act de facto like commodity prices, e.g. currently show huge cash demand.
Does you agree with my answers?
Federal Reserve says rates to stay at bottom until economy on track
Federal Reserve rate decision highlights April 29, 2020
- Rates unchanged in a range of 0.00%-0.25%, as expected
- Fed says rates to stay at lower bound until economy has weathered recent events and on track to achieve unemployment and inflation goals
- Fed funds rate 2-year projection vs 1.6% prior
- Fed funds rate 3-year projection vs 1.9% prior
- Fed funds rate long-term projection vs 2.50% prior
Powell will host a virtual press conference at 1830 GMT. The next scheduled meeting is June 9-10
European shares end with solid gains as risk on sentiment increases
Hopes f him him him rom Gilead news propel European shares higher.
European indices are ending the session with solid gains on hopes from the Gilead remdesivir drug,
- German DAX, +3.0%
- France’s CAC, +2.32%
- UK’s FTSE 100, +2.77%
- Spain’s Ibex, +3.24%
In the European 10 year note sector are mostly lower with the exception of Italy (their credit rating was lowered by Fitch after the close yesterday)
Fitch downgrades Italy to BBB-, stable outlook
Fitch Ratings agency says the downgrade reflects the significant impact of the COVID-19 pandemic on Italy’s economy and fiscal position
- expects Italy’s govmt debt to GDP ratio to increase this year, by around 20%
- Fitch forecasts an 8% GDP contraction in 2020
- says Italy’s gross general government debt to GDP ratio will increase by around 20pp this year
- stable outlook partly reflects view that ECB’s net asset purchases will facilitate Italy’s substantial fiscal response to covid-19 pandemic
- downward pressure on Italy’s rating could resume if government does not implement credible economic growth & fiscal strategy
- says recession & economic policy response to covid-19 pandemic will result in sizeable deterioration of Italy’s budget balance this year
This is a negative input for euro
Link to Fitch for more … note this:
- In accordance with Fitch’s policies, the issuer appealed and provided additional information to Fitch that resulted in a rating action that is different than the original rating committee outcome.
Huh … reading between the lines on this it could have been a worse outcome for Italy?
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Note – S&P recently affirmed Italy at BBB/A-2 with an outlook negative.
And – the ECB will still accept Italy debt as collateral given their recent changes to accept debt which was eligible on April 7th.
Nasdaq leads the way to the upside today. All major indices fall for the week.
Dow posts a 3 day win streak. All 11 S&P sectors close higher
the major indices all closing higher for the day with the NASDAQ index leading the way to the upside. The Dow industrial average posted a gain for the 3rd day in a row. All 11 sectors of the S&P closed higher.
The final numbers are showing:
- Dow, +260 points or 1.11% at 23775.27
- S&P index +38.94 points or 1.39% at 2836.74
- Nasdaq index +139.77 points or 1.65% at 8634.52
For the week, all 3 major indices closed lower with the NASDAQ outperforming relatively. The numbers for the week show:
- Dow, -1.93%
- S&P, -1.32%
- Nasdaq close modestly lower at -0.18%.
For the week, some oversized winners included:
- Beyond Meat +41.44% as meet distributors close operations due to coronavirus
- Rite Aid +22.75%
- Papa John’s, +10.52%
- Lyft, +9.74%
- DuPont, +9.23%
- Chipotle, +8.23%
- Twitter, +7.64%
- Facebook, +6.05%
- Schlumberger J, +5.3%
- IBM +3.83%
- Bristol-Myers Squibb, +2.71%
- Box, +2.45%
- Johnson & Johnson +1.81%
- Home Depot, +1.35%
- Pfizer, +1.33%
Big decliners for the week included:
- Boeing, -16.24%
- United Airlines -12.07%
- Deutsche Bank, -9.02%
- Delta Air Lines, -7.66%
- Slack, -7.26%
- General Dynamics, -6.5%
- Southwest Airlines, -5.93%
- Coca-Cola, -5.47%
- Walt Disney, -5.16%
- Gilead -5.16%
- Citigroup, -5.15%
- Wells Fargo, -5.11%
- Lockheed Martin, -4.93%
- American Express, -4.87%
- Procter & Gamble, -4.8%
- Bank of America, -4.73%
- J.P. Morgan, -4.71%
- Raytheon technologies, -4.06%
- travelers, -4.05%
Gildead drug Remdesivir flops in first trial – report
Stocks fall on the report
The FT is out with a report. This news has taken down the entire market and USD/JPY.
From the FT, which cites WHO documents that were briefly and mistakenly published on the WHO website.
A potential antiviral drug for the coronavirus has flopped in its first randomised clinical trial, disappointing scientists and investors who had high hopes for remdesivir, according to draft documents published accidentally by the World Health Organization and seen by the Financial Times.The Chinese trial showed remdesivir – developed by California-based Gilead Sciences – did not improve patients’ condition or reduce the pathogen’s presence in the bloodstream. Researchers studied 237 patients, giving the drug to 158 and comparing their progress with the remaining 79.
US stocks move higher led by the Nasdaq index
Dow lags as Boeing slumps
The US stock indices closed higher on the day led by the Nasdaq index. The S&P and Dow closed higher as well but the gains were well behind the tech heavy Nasdaq. For the Dow, the blame fall firmly on Boeing which alone fell over 7% on the day.
The final numbers are showing:
- S&P index rose 16.19 points or 0.58% at 2799.55
- Nasdaq index rose 139.18 points or 1.66% at 8532.36
- Dow rose 33.33 points or 0.14% at 23537.68
NASDAQ index closes above its 50 and 200 day moving averages
NASDAQ up for the 4th day in a row
The NASDAQ index is the star performer today, rising for the 4th day in a row closing above its 50 day and 200 day moving averages. The close above the 200 day moving averages the 1st since March 6. The other indices also had solid days today with the S&P and Dow closing at the highest level since March 10.
The final numbers are showing:
- S&P index up 84.43 points or 3.06% at 2846.06
- NASDAQ index up 323.31 points or 3.95% at 8515.74
- Dow industrial average up 558.99 points or 2.39% at 23949.76
Some of the major gainers today included:
- Tesla, +9.07%
- AMD, +7.83%
- United holdings, +6.72%
- Adobe, +6.24%
- Qualcomm, +5.75%
- Delta Air Lines, +5.59%
- Raytheon, +5.27%
- Nvidia, +5.3%
- Amazon, +5.28%
- Apple, +5.04%
- Microsoft, +4.95%
- J&J, +4.39%
Goldman Sachs are unimpressed by the oil output cut deal – “insufficient”
GS say the OPEC+ G20 production cut is too little too late, and the bank sees downside risk to its $20/barrel price forecast
- “Today’s agreement leaves the voluntary cuts as still too little and too late to avoid breaching storage capacity, ensuring that low oil prices force all producers to contribute to the market rebalancing”
- no voluntary cuts could be large enough to offset the 19m b/d average April-May demand loss due to the coronavirus
- OPEC+ voluntary cut is an only actual 4.3m b/d reduction in production from 1Q 2020 levels
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Oil traded higher initially upon market reopen for the week, gave it all back and turned negative and is now not much changed from late last week levels.